XRP Price Forecast: Investors Flee, New Wallets Hit Yearly Low

The crypto market took a sharp hit today, with Bitcoin falling 4% to $82,176, extending its weekly decline to 11%. The overall market dropped 7%, with major altcoins like Ethereum (ETH), Solana (SOL), and XRP losing between 7-9%.

This sell-off is driven by rising tensions in the U.S.-China trade war, Trump’s executive order blocking taxpayer funds from purchasing altcoins, and a massive $616 million in liquidations—mostly from long positions.

XRP’s Decline Deepens: What’s Driving the Drop?

XRP has struggled since hitting its all-time high of $3.40 on January 16. The token has now fallen to $2.18, marking a steep 35% drop in two months. This decline has significantly reduced the number of XRP tokens held in profit.

On-chain data shows that XRP’s supply in profit has shrunk by 6.39 billion tokens in just a week, the lowest level this year. With more investors holding XRP at a loss, selling pressure is rising, weakening market sentiment and making further declines likely.

XRP’s New Demand Hits Lowest Level of the Year

A key factor behind XRP’s weakness is a drop in new demand. Data from Santiment reveals that only 4,516 new wallet addresses were created on Sunday to trade XRP—the lowest daily count this year.

Fewer new investors mean less trading activity, reducing support for the token. If this trend continues, XRP may struggle to recover in the short term.

Will Altcoins Drop Further?

Morgan Stanley’s chief strategist, Michael Wilson, expects the S&P 500 to fall 5% in the first half of the year, which could further pressure altcoins like XRP as liquidity tightens.

Adding to the uncertainty, Trump recently described the U.S. economy as being in a “period of transition,” while Treasury Secretary Scott Bessent warned of short-term economic disruptions. These factors could keep altcoins under pressure.

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XRP Technical Analysis

Since its all-time high, XRP has been trading below a descending trendline, forming a pattern of lower highs. This suggests sellers remain in control, limiting any recovery attempts.

Currently hovering around $2.17, XRP risks dropping below $2, with key support at $1.47. For a rebound, strong buying pressure is needed to break above the descending trendline. If that happens, the next major resistance level is at $2.93. A breakout above this level could signal a recovery.

However, with demand at a yearly low and bearish sentiment dominating, XRP faces an uphill battle. Unless investor interest returns and market conditions improve, the token could see further declines in the coming weeks.

If history is any guide, a breakout could change the game—but for now, the bears remain in control.

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